Used Car Buying Tips
So it’s time to buy a new car. Your old workhorse just isn’t cutting it anymore. But should you buy a shiny, new, off-the-lot bank breaker, or go with something a little more weathered? If money is a concern to you – as if anyone would say “no” to that – please, consider buying used. It’s a sensible alternative, and it’s not like you need something brand new. Even cars that are only a year old see depreciation of 20-30% - consider whether you’ll still have this car a year from now, and what it means to lose 30% of its value. Is one model year really worth that much money? Let those people who have money to burn swallow those massive depreciation costs, and benefit from their foolhardy spending.
Aside from the initial cost, there are several other ways buying used can save you money. Insurance rates are lower, negotiation is more flexible (especially with private sellers), and if you’re looking at “gently used” properties, you are often lucky enough to find a vehicle still covered by the factory warrantee.
Clearly, buying a used car makes good sense financially, but there are a lot of sharks in the used car waters, so don’t enter them unprepared.
The first thing you should do, before kicking any tires, is work out a budget. Determine what you want to spend, as well as what you can afford to spend. And don’t forget about the associated costs! Taxes, title transfer, registration, and insurance can easily add up to at least 10% of the value of the car, so build those costs into your budget. And remember that the value of the car is not always the same as what you actually pay.
Once you’ve counted your beans, you can start the fun part of the process – shopping! Find cars that fall somewhere under your budget – it’s always good to leave some wiggle room. Consider different models and different model options. Luxury items may seem enticing, but think with your wallet – can you live without a heated steering wheel? Consider what you actually need, versus what you just want because it would be nice to have – a lot of the cost of a car is tied up in the options.
After you decide what you’re looking for, expand your scope a little to include different models. Just because you had a Toyota Corolla a few years ago that you really loved doesn’t mean you should rule out a Hyundai Elantra. They’re similar cars, but one may be substantially cheaper. Check different online reviews or Consumer Reports. You may be surprised to find you actually prefer the cheaper options!
Which brings us to our next point: do your research. Just because one car is cheaper than another doesn’t mean it will stay that way in the long run. Check message boards, user reviews, talk to your friends. A more reliable car may be worth a higher initial price. This research stage is also where used cars have a distinct advantage over new cars. It’s a safe bet that any major deficiencies will have been found and written about on the Internet long before you have the chance to discover them yourself.
Once you put together a short list of cars for sale in your area that fit your needs, your budget, and your personal preferences, it’s time to get down to brass tacks. More research is involved, this time on the specific vehicles themselves. The Kelley Blue Book is the gold standard for determining the worth of a car, so start there to determine the fair market value for that make and model. Once you have that figure in mind, a vehicle history report like those available from CARFAX can offer a wealth of information about the specific car in question, which can greatly increase your negotiating power, or maybe even show that the car isn’t worth your time.